NEXTNAV INC
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
NN$8.61+7.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001213900-24-040871
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001213900-24-066133
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 78 current paragraphs.
38 unchanged; 25 reworded; 13 added; 5 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 11 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Interest expense, net of interest income, increased by $2.0 million, or 576%, to $2.3 million for the three months ended June 30, 2024 from $0.3 million for the three months ended June 30, 2023. The increase in interest expense was due to interest and amortization of debt discounts on our senior secured notes issued during the second and third quarters of 2023.
Current report
Comparison of the Six Months ended June 30, 2024 and 2023
Current report
Revenue
Current report
Operating Expense
Current report
Cost of Goods Sold (COGS)
Current report
COGS decreased by $0.5 million, or 8%, to $5.7 million for the six months ended June 30, 2024 from $6.2 million for the six months ended June 30, 2023. The decrease was primarily driven by a $1.0 million decrease instock-based compensation, and a $0.2 million decrease inoutside consulting expenses. The decreases were partially offset bya $0.2 million increase in non-recurring engineering services, a $0.2 million increase in site rent expense due to deployment of new sites in 2023, anda $0.3 million increase inother operational expenses.
Current report
Research and Development
Current report
Research and development expenses decreased by $0.8 million, or 8.3%, to $8.8 million for the six months ended June 30, 2024 from $9.6 million for the six months ended June 30, 2023. The decrease was primarily driven by a $0.7 million decrease instock-based compensation, a $0.6 million decrease in software license expenses, and a$0.1 million decrease in professional services. The decreases were partially offset by a $0.6 million increase in payroll-related expenses driven by headcount.
Current report
Selling, General and Administrative
Current report
Selling, general and administrative expenses increased by $4.0 million, or 31.7%, to $16.6 million for the six months ended June 30, 2024 from $12.6 million for the six months ended June 30, 2023. The increase was primarily driven by a $1.8 million increase in payroll-related expenses driven byheadcount costs, executive andemployment separation costs, a$1.3 million increase in stock-based compensation, a $0.9 million increase in professional services, a $0.2 million increase in outside consulting expenses, anda$0.2 million increase in other operational expenses. The increases were partially offset by a $0.4 million decrease in directors’ and officers’ insurance.
Current report
Other Expense
Current report
Other expense was $19.9 million for the six months ended June 30, 2024 compared with other expense of $3.1 million for the six months ended June 30, 2023. The change was primarily driven by the changes in the fair value of warrants and asset purchase agreement liability.
Current report
Net cash provided by financing activities during thesix months ended June 30, 2023 was $48.1 million, primarily reflecting cash proceeds from senior secured loans and partially offset by debt issuance cost.
Removed paragraphs (5)
Previous report
Depreciation and Amortization
Previous report
Interest Income (Expense)
Previous report
Depreciation and Amortization
Previous report
Interest Income (Expense)
Previous report
Net cash used in financing activities during thethree months ended March 31, 2023 was $1 thousand primarily reflecting repayment of debt partially offset by cash proceeds from exercise of common stock options.
Reworded paragraphs (25)
Previous wording
Thefollowing discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying quarterly unaudited condensed consolidated financial statements and our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Our 2023 Form 10-K includes additional information about our significant accounting policies, practices, and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties associated with our financial condition and operating results. In addition to historical financial information, some of the information contained in the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results and outcomes could differ materially for a variety of reasons. You should review “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Quarterly Report on Form 10-Q, as well as Item 1A, “Risk Factors” in our 2023 Form 10-K, as well as those otherwise described or updated from time to time in our other filings with the SEC, for a discussion of important factors that could cause our actual results to differ materially from the results described or implied by the forward-looking statements contained in the following discussion and analysis.
Current wording
Thefollowing discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying quarterly unaudited condensed consolidated financial statements and our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Our 2023 Form 10-K includes additional information about our significant accounting policies, practices, and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties associated with our financial condition and operating results. In addition to historical financial information, some of the information contained in the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual results and outcomes could differ materially for a variety of reasons. You should review “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Quarterly Report on Form 10-Q, as well as Item 1 A, “Risk Factors” in our 2023 Form 10-K, as well as those otherwise described or updated from time to time in our other filings with the SEC, for a discussion of important factors that could cause our actual results to differ materially from the results described or implied by the forward-looking statements contained in the following discussion and analysis.
Previous wording
Weare the market leader in delivering resilient, next generation positioning, navigation and timing (“PNT”) solutions designed to complement and back up existing Global Positioning System (“GPS”) and Global Navigation Satellite Systems (“GNSS”) by addressing the limitations and vulnerabilities inherent in space-based systems. Our complementary PNT solutions are built on a deep asset base, which we are evolving to utilize 5G New Radio (“5G NR”) technologies. We expect NextGen, the evolution of our technology platform to 5G NR, to significantly improve the efficiency and flexibility of our operations, technically enabling the delivery of high-quality PNT based on a 5G broadband deployment. Since the inception of NextNav, LLC in 2007, we have secured valuable Federal Communications Commission (“FCC”) licenses for a contiguous 8 MHz band of Lower 900 MHz spectrum covering over 90% of the U.S. population, subject to appropriate regulatory approvals have signed an agreement to acquire licenses for an additional 4MHz of Lower 900MHz spectrum, been granted more than 190 patents related to our systems and services, and standardized our TerraPoiNT technology in 3GPP, the global telecommunications standards-setting body.
Current wording
Weare the market leader in delivering resilient, next generation positioning, navigation and timing (“PNT”) solutions designed to complement and back up existing Global Positioning System (“GPS”) and Global Navigation Satellite Systems (“GNSS”) by addressing the limitations and vulnerabilities inherent in space-based systems. Our complementary PNT solutions are built on a deep asset base, which we are evolving to utilize 5 G New Radio (“5 G NR”) technologies. We expect NextGen, the evolution of our technology platform to 5 G NR, to significantly improve the efficiency and flexibility of our operations, technically enabling the delivery of high-quality PNT based on a 5 G broadband deployment. Since the inception of NextNav, LLC in 2007, we have secured valuable Federal Communications Commission (“FCC”) licenses for a contiguous 8 MHz band of Lower 900 MHz spectrum covering over 90% of the U.S. population, subject to appropriate regulatory approvals have signed an agreement to acquire licenses for an additional 4 MHz of Lower 900 MHz spectrum, been granted more than 180 patents related to our systems and services, and standardized our TerraPoiNT technology in 3 GPP, the global telecommunications standards-setting body.
Previous wording
On April 16, 2024 we petitioned the Federal Communications Commission (the “FCC”) to commence a rule making to update the Lower 900MHz band plan to allow the Company to utilize a 15MHz nationwide configuration for both PNT and 5G broadband. The Company believes that modernizing the Lower 900 MHz Band will simultaneously enable a high-performing terrestrial PNT network to complement and back up GPS, a critical national security imperative, and add 5G mobile broadband capacity, a substantial public interest benefit. NextNav’s NextGen technology will allow one or more partners to integrate our Lower 900MHz spectrum into their 5G networks, while NextNav implements, operates and manages additional PNT-optimized infrastructure over the 5G network.
Current wording
On April 16, 2024 we petitioned the FCC to commence a rule making to update the Lower 900 MHz band plan to allow us to utilize a 15 MHz nationwide configuration for both PNT and 5 G broadband. We believe that modernizing the Lower 900 MHz Band will simultaneously enable a high-performing terrestrial PNT network to complement and back up GPS, a critical national security imperative, and add 5 G mobile broadband capacity, a substantial public interest benefit. Our NextGen technology is designed to allowone or more partners to integrate our Lower 900 MHz spectrum into their 5 G networks, while we implement, operate and manage additional PNT-optimized infrastructure over the 5 G network.
Previous wording
We currently deliver differentiated PNT solutions through our network-based Pinnacle and TerraPoiNT solutions. Our Pinnacle service provides accurate altitude to any device with a barometric pressure sensor, including most off-the-shelf smartphones., We launched our Pinnacle network in partnership with AT&T Services, Inc. (“AT&T”) for FirstNet®, the nationwide, interoperable public safety broadband network, and our network covers over 90% of commercial structures over three stories in the U.S. In addition to public safety applications and FirstNet®, our network is being used for enhanced 911 (“E911”) by Verizon Communications, Inc. (“Verizon”), and a growing set of devices operating on the remaining national cellular network providers. Our Pinnacle network is also an important component of our PNT resiliency services, and is being evaluated as a persistent PNT characterization platform.
Current wording
We currently deliver differentiated PNT solutions through our network-based Pinnacle and TerraPoiNT solutions. Our Pinnacle service provides accurate altitude to any device with a barometric pressure sensor, including most off-the-shelf smartphones. We launched our Pinnacle network in partnership with AT&T Services, Inc. (“AT&T”) for FirstNet®, the nationwide, interoperable public safety broadband network, and our network covers over 90% of commercial structures over three stories in the U.S. In addition to public safety applications and FirstNet®, our network is being used for enhanced 911 (“E 911”) by Verizon Communications, Inc. (“Verizon”), and a growing set of devices operating on the remaining national cellular network providers. Our Pinnacle network is also an important component of our PNT resiliency services, and is being evaluated as a persistent PNT characterization platform.
Previous wording
Our TerraPoiNT systems is a terrestrially-based network designed to address the limitations and vulnerabilities inherent in space-based PNT systems, and our NextGen technology, through the adoption of 5G NR, will simultaneously support both PNT and 5G broadband capabilities. Space-based PNT systems transmit a faint, unencrypted signal, which is often unavailable indoors, distorted in urban areas, and vulnerable to both jamming and spoofing. TerraPoiNT and its NextGen evolution overcome these limitations through the terrestrial transmission of a PNT signal on licensed Lower 900 MHz spectrum. Unlike space-based signals, the TerraPoiNT and NextGen signals can be reliably received indoors and in urban areas, are difficult to jam or spoof, and can support robust authentication. TerraPoiNT and NextGen signals can embed Pinnacle information to provide a full 3D PNT solution, and can be configured to provide NIST timing distribution services. Because our NextGen technology will be built on 5G NR, we expect significantly increased geographic coverage, more rapid network availability and expanded device availability for PNT services when combined with one or more 5G broadband partners’ networks. We believe that these capabilities are an essential complement and backup in the event of GPS disruptions, and are a critical need due to the economy’s reliance on GPS for location and precision timing. GPS resiliency is increasingly a U.S. national security priority, and is rising in priority in the European Union, non-European Union countries in Eastern Europe and in other parts of the world due to both the demonstrated vulnerability and lack of local control of space-based signals and systems, highlighted by recent events in Ukraine, the Middle East and elsewhere. Critical infrastructure, including communications networks and power grids, require a reliable GPS signal for accurate timing. A failure of GPS could be catastrophic, and there is no comprehensive, terrestrial backup that is widely deployed today.
Current wording
Our TerraPoiNT system is a terrestrially-based network designed to address the limitations and vulnerabilities inherent in space-based PNT systems, and our NextGen technology, through the adoption of 5 G NR, will simultaneously support both PNT and 5 G broadband capabilities. Space-based PNT systems transmit a faint, unencrypted signal, which is often unavailable indoors, distorted in urban areas, and vulnerable to both jamming and spoofing. TerraPoiNT and its NextGen evolution overcome these limitations through the terrestrial transmission of a PNT signal on licensed Lower 900 MHz spectrum. Unlike space-based signals, the TerraPoiNT and NextGen signals can be reliably received indoors and in urban areas, are difficult to jam or spoof, and can support robust authentication. TerraPoiNT and NextGen signals can embed Pinnacle information to provide a full 3 D PNT solution, and can be configured to provide National Institute of Standards and Technology timing distribution services. Because our NextGen technology will be built on 5 G NR, we expect significantly increased geographic coverage, more rapid network availability and expanded device availability for PNT services when combined withone or more 5 G broadband partners’ networks. We believe that these capabilities are an essential complement and backup in the event of GPS disruptions, and are a critical need due to the economy’s reliance on GPS for location and precision timing. GPS resiliency is increasingly a U.S. national security priority, and is rising in priority in the European Union, non-European Union countries in Eastern Europe and in other parts of the world due to both the demonstrated vulnerability and lack of local control of space-based signals and systems, highlighted by recent events in Ukraine, the Middle East and elsewhere. Critical infrastructure, including communications networks and power grids, require a reliable GPS signal for accurate timing. A failure of GPS could be catastrophic, and there is no comprehensive, terrestrial backup that is widely deployed today.
Previous wording
Simultaneously, demand for wireless data services continues to grow. The backbone of wireless data services, electromagnetic spectrum, is a finite resource. Our spectrum licenses in the Lower 900 MHz band are referred to as “low-band spectrum”. There is a finite amount of low-band spectrum available, and it has favorable coverage characteristics compared to higher frequencies, including the ability to provide services indoors and at greater distances. These characteristics result in its ability to be used for coverage and to be deployed more economically, with higher-frequency spectrum often used to provide additional capacity in targeted locations. Our transition to 5G NR as the basis for our PNT services will provide a technical capability for simultaneous broadband data in our band, in addition to our PNT services, and, subject to appropriate regulatory approvals, may allow us to utilize our spectrum to help meet the continued, growing demand for wireless data capacity while making more efficient use of our Lower 900MHz spectrum licenses.
Current wording
Simultaneously, demand for wireless data services continues to grow. The backbone of wireless data services, electromagnetic spectrum, is a finite resource. Our spectrum licenses in the Lower 900 MHz band are referred to as “low-band spectrum”. There is a finite amount of low-band spectrum available, and it has favorable coverage characteristics compared to higher frequencies, including the ability to provide services indoors and at greater distances. These characteristics result in its ability to be used for coverage and to be deployed more economically, with higher-frequency spectrum often used to provide additional capacity in targeted locations. Our transition to 5 G NR as the basis for our PNT services will provide a technical capability for simultaneous broadband data in our band, in addition to our PNT services, and, subject to appropriate regulatory approvals, may allow us to utilize our spectrum to help meet the continued, growing demand for wireless data capacity while making more efficient use of our Lower 900 MHz spectrum licenses.
Previous wording
As of March 2024, TerraPoiNT is deployed and available, with metro-wide service in the San Francisco Bay Area and select services available in 92 total markets nationally. It is also in use by the National Aeronautics and Space Administration (“NASA”) at its Langley Research Center in Hampton, VA for drone operations research and at its Ames facility in Mountain View, CA, leveraging our network in the Bay Area.
Current wording
Asof June 2024, TerraPoiNT is deployed and available, with metro-wide service in the San Francisco Bay Area and select services available in 92 total markets nationally. In addition, NextNav supports a system deployed by the National Aeronautics and Space Administration at its Langley Research Center in Hampton, VA for drone operations research and is contracted to provide service at its Ames facility in Mountain View, CA, leveraging our network in the Bay Area
Previous wording
On October 31, 2022, we acquired Nestwave, SAS, a French société par actions simplifiée (as subsequently renamed, “NextNav France”), a privately held global leader in low-power geolocation, and completed integrating the NextNav France team into our existing engineering and technology organization during 2023. NextNav France provides advanced geolocation solutions to IOT modem and digital signal processor vendors and end IOT users. We believe that the combination of our technology with NextNav France’s LTE/5G capabilities will assist us in evolving our system to align with 5G NR.
Current wording
On October 31, 2022, we acquired Nestwave, SAS, a French société par actions simplifiée (as subsequently renamed, “NextNav France”), a privately held global leader in low-power geolocation, and completed integrating the NextNav France team into our existing engineering and technology organization during 2023. NextNav France provides advanced geolocation solutions to Internet of Things (“IOT”) modem and digital signal processor vendors and end IOT users. We believe that the combination of our technology with NextNav France’s LTE/5 G capabilities will assist us in evolving our system to align with 5 G NR.
Previous wording
NextNav France’s intellectual property also included a “soft GPS” capability, allowing GPS processing on LTE and 5G NR chipsets, reducing the cost and power requirements for certain types of GPS services for IOT devices. We have licensed this technology to chipset vendors, including a global Tier 1 LTE and 5G NR modem vendor. We expect to start to see the results of these licensing arrangements in 2024.
Current wording
NextNav France’s intellectual property also included a “soft GPS” capability, allowing GPS processing on LTE and 5 G NR chipsets, reducing the cost and power requirements for certain types of GPS services for IOT devices. We have licensed this technology to chipset vendors, including a global Tier 1 LTE and 5 G NR modem vendor. We expect to start to see the results of these licensing arrangements in 2024.
Previous wording
Other income (expense) consists of miscellaneous non-operating items, such as change in fair value of warrants, equity method income (loss), and foreign currency gains (losses).
Current wording
Other income (expense) consists of miscellaneous non-operating items, such as change in fair value of warrants and asset purchase agreement liability, equity method income (loss), and foreign currency gains (losses).
Previous wording
Revenue increased by $0.2 million, or 26.0%, to $1.0 million for thethree months ended March 31, 2024 from $0.8 million for thethree months ended March 31, 2023. The increase was driven by an increase in recurring service revenue from technology and services contracts with commercial customers. For thethree months ended March 31, 2024, onecustomer accounted for 75% of total revenue and another customer accounted for 14% of total revenue. For thethree months ended March 31, 2023, one customer accounted for 86% of total revenue.
Current wording
Revenue increased by $0.3 million, or 38.1%, to $1.1 million for thethree months ended June 30, 2024 from $0.8 million for thethree months ended June 30, 2023. The increase was driven by an increase in recurring service revenue from technology and services contracts with commercial customers, including in support of government opportunities. For thethree months ended June 30, 2024, onecustomer accounted for 71% of total revenue and another customer accounted for 14% of total revenue. For thethree months ended June 30, 2023, one customer accounted for 89% of total revenue.
Previous wording
COGS decreased by $0.3 million, or 8.7%, to $2.8 million for thethree months ended March 31, 2024 from $3.0 million for thethree months ended March 31, 2023. The decrease was primarily driven by a $0.5 million decrease in stock-based compensation, and a $0.1 million decrease in outside consulting expenses. The decreases were partially offset by a $0.2 million increase in site rent expense due to deployment of new sites after the first quarter of 2023, and a $0.1 million increase in payroll-related expenses.
Current wording
COGS decreased by $0.2 million, or 6.9%, to $2.9 million for thethree months ended June 30, 2024 from $3.1 million for thethree months ended June 30, 2023. The decrease was primarily driven by a $0.5 million decrease in stock-based compensation, and a $0.1 million decrease in outside consulting expenses. The decreases were partially offset by a $0.2 million increase in non-recurring engineering services, anda $0.2 million increase in other operational expenses.
Previous wording
Research and development expenses increased by $0.1 million, or 2.0%, to $4.7 million for thethree months ended March 31, 2024 from $4.6 million for thethree months ended March 31, 2023. The increase was primarily driven by a $0.4 million increase inpayroll-related expenses driven by headcount. The increases were partially offset by a $0.1 million decrease in software license expenses, a $0.1 million decrease in outside consulting expenses, and $0.1 million decrease in stock-based compensation.
Current wording
Research and development expenses decreased by $0.9 million, or 17.7%, to $4.1 million for thethree months ended June 30, 2024 from $5.0 million for thethree months ended June 30, 2023. The decrease was primarily driven by a $0.6 million decrease instock-based compensation, a $0.3 million decrease in other operational expenses, and a $0.2 million decrease in software license expenses. The decreases were partially offset by a $0.1 million increase inpayroll-related expenses, and a $0.1 million increase in outside consulting expenses.
Previous wording
Selling, general and administrative expenses increased by $2.4 million, or 39.5%, to $8.4 million for thethree months ended March 31, 2024 from $6.1 million for thethree months ended March 31, 2023. The increase was primarily driven by a $1.1 million increase inpayroll-related expenses driven by headcount, a$0.9 million increase in stock-based compensation, a $0.4 million increase in professional services, a $0.1 million increase in outside consulting expenses, anda$0.1 million increase in other operational expenses. The increases were partially offset by a $0.2 million decrease in directors’ and officers’ insurance, and a $0.1 million decrease in marketing and recruiting cost.
Current wording
Selling, general and administrative expenses increased by $1.6 million, or 24.4%, to $8.1 million for thethree months ended June 30, 2024 from $6.5 million for thethree months ended June 30, 2023. The increase was primarily driven by a $0.7 million increase inpayroll-related expenses driven by headcount costs andemployment separation costs, a$0.5 million increase inprofessional services, a $0.4 million increase instock-based compensation, a $0.1 million increase in outside consulting expenses, anda$0.1 million increase in other operational expenses. The increases were partially offset by a $0.2 million decrease in directors’ and officers’ insurance.
Previous wording
Depreciation and amortization expenses increased by $0.2 million, or 17%, to $1.3 million for thethree months ended March 31, 2024 from $1.1 million for thethree months ended March 31, 2023. The increase in depreciation and amortization expense is primarily attributable to placing TerraPoiNT network assets in service after the first quarter of 2023.
Current wording
Depreciation and amortization expenses increased by $0.1 million, or 10%, to $1.3 million for thethree months ended June 30, 2024 from $1.2 million for thethree months ended June 30, 2023. The increase in depreciation and amortization expense is primarily attributable to placing TerraPoiNT network assets in service after the second quarter of 2023.
Previous wording
Other expense was $13.2 million for thethree months ended March 31, 2024 compared with other expense of $2.9 million for thethree months ended March 31, 2023. The change was primarily driven by the change in the fair value of warrants.
Current wording
Other expense was $6.7 million for thethree months ended June 30, 2024 compared with other expense of $0.2 million for thethree months ended June 30, 2023. The change was primarily driven by the changes in the fair value of warrants and asset purchase agreement liability.
Previous wording
Interest expense for thethree months ended March 31, 2024 was $3.2 million whereas interest income was$1.0 million resulting in net interest expense of $2.2 million for thethree months ended March 31, 2024 compared with interest income of $0.5 million for thethree months ended March 31, 2023. The increase in interest expense was due to interest and amortization of debt discounts on our senior secured notes issued during second and third quarters of 2023.
Current wording
Interest expense, net of interest income, for the six months ended June 30, 2024 was $4.5 million. Interest income, net of interest expense, for the six months ended June 30, 2023 was $0.1 million. The increase in interest expense was due to interest and amortization of debt discounts on our senior secured notes issued during the second and third quarters of 2023.
Previous wording
We have incurred losses since our inception and to date have generated only limited revenue. We have primarily relied upon debt and equity financings to fund our cash requirements. During thethree months ended March 31, 2024 and 2023, we incurred net losses of $31.6 million and $16.3 million, respectively. During thethree months ended March 31, 2024, our net cash used in operating activities and investing activities was $7.0 million and $2.1 million, respectively. During thethree months ended March 31, 2023, our net cash used in operating activities and investing activities was $7.4 million and $4.0 million, respectively. As of March 31, 2024, we had cash and cash equivalents and marketable securities of $79.2 million and an accumulated deficit of $791.8 million. We expect to incur additional losses and higher operating expenses for the foreseeable future. Our primary use of cash is to fund our operations as we continue to grow our business. We will require a significant amount of cash for expenditures as we invest in ongoing research and development and our PNT networks.
Current wording
We have incurred losses since our inception and to date have generated only limited revenue. We have primarily relied upon debt and equity financings to fund our cash requirements. During thesix months ended June 30, 2024 and 2023, we incurred net losses of $56.0 million and $32.1 million, respectively. During thesix months ended June 30, 2024, our net cash used in operating activities and investing activities was $19.3 million and $22.3 million, respectively. During thesix months ended June 30, 2023, our net cash used in operating activities and investing activities was $15.9 million and $26.7 million, respectively. As of June 30, 2024, we had cash and cash equivalents and marketable securities of $86.3 million and an accumulated deficit of $816.2 million. We expect to incur additional losses and higher operating expenses for the foreseeable future. Our primary use of cash is to fund our operations as we continue to grow our business. We will require a significant amount of cash for expenditures as we invest in ongoing research and development and our PNT networks.
Previous wording
In 2023, we issued $70.0 million in aggregate principal amount of senior secured notes with a fixed interest rate of 10% to the lenders thereto. Such notes will mature on December 1, 2026 with interest payable semi-annually in arrears on June 1 and December 1 of each year. We may elect, at our sole discretion, to pay up to 50% of the accrued and unpaid interest on the senior secured notes due with our common stock. Refer to Note 8 to our condensed consolidated financial statements for the three months ended March 31, 2024 included elsewhere in this Quarterly Report on Form 10-Q. Since the end of first quarter and as of May 03, 2024, 7.7 million of Debt Warrants were exercised for an aggregate of $16.6 million in cash.
Current wording
In 2023, we issued $70.0 million in aggregate principal amount of senior secured notes with a fixed interest rate of 10% to the lenders thereto. Such notes will mature on December 1, 2026 with interest payable semi-annually in arrears on June 1 and December 1 of each year. We may elect, at our sole discretion, to pay up to 50% of the accrued and unpaid interest on the senior secured notes due with our common stock. Refer to Note 8 to our condensed consolidated financial statements for the three and six months ended June 30, 2024 included elsewhere in this Quarterly Report on Form 10-Q. Since the end of second quarter and as of July 31, 2024,2.3 million of Debt Warrants were exercised for an aggregate of $5.0 million in cash.
Previous wording
Net cash used in operating activities during thethree months ended March 31, 2024 was $7.0 million, resulting primarily from a net loss of $31.6 million adjusted for non-cash charges of $4.2 million for stock-based compensation, non-cash expense of $13.2 million for change in the fair value of warrant liability,$1.3 million for depreciation and amortization, and $1.4 million for amortization of debt discount. Additionally, there was a net increase in operating liabilities of $4.4 million.
Current wording
Net cash used in operating activities during thesix months ended June 30, 2024 was $19.3 million, resulting primarily from a net loss of $56.0 million adjusted for non-cash charges of $7.9 million for stock-based compensation, non-cash expense of $21.7 million for change in the fair value of warrant liability,$2.6 million for depreciation and amortization, and $3.0 million for amortization of debt discount. These changes were partially offset by a net increase in operating liabilities of$3.6 million, non-cash income of$1.9 million for change in fair value of asset purchase agreement liability and $0.3 million realized and unrealized gain on marketable securities.
Previous wording
Net cash used in operating activities during the three months ended March 31, 2023 was $7.4 million, resulting primarily from a net loss of $16.3 million adjusted for non-cash charges of $3.9 million for stock-based compensation, non-cash expense of $2.8 million for change in the fair value of warrant liability,$1.1 million for depreciation and amortizationand $0.1 million for equity method investment loss. Additionally, there was a net decrease in operating assets of $1.0 million.
Current wording
Net cash used in operating activities during thesix months ended June 30, 2023 was $15.9 million, resulting primarily from a net loss of $32.1 million adjusted for non-cash charges of $8.2 million for stock-based compensation, non-cash expense of $3.1 million for change in the fair value of warrant liability,$2.3 million for depreciation and amortization,$0.5 million for amortization of debt discount, $(0.2) million realized and unrealized gain on marketable securities, and $0.1 million for equity method investment loss. Additionally, there was a net decrease in operating assets of $2.2 million.
Previous wording
Net cash used by investing activities during thethree months ended March 31, 2024 was $2.1 million, representing thepurchase ofmarketable securities, net of sale and maturity ofmarketable securities, and cash used for property and equipment primarily related to the deployment of TerraPoiNT network and internal use software.
Current wording
Net cash used in investing activities during thesix months ended June 30, 2024 was $22.3 million, representing thepurchase ofmarketable securities, net of sale and maturity ofmarketable securities, and cash used for asset purchase agreement and internal use software.
Previous wording
Net cash provided by investing activities during the three months ended March 31, 2023 was $4.0 million, representing proceeds from the sale and maturity of marketable securities, partially offset by cash used for property and equipment primarily related to the deployment of the Pinnacle and TerraPoiNT network and internal use software.
Current wording
Net cash used in investing activities during the six months ended June 30, 2023 was $26.7 million, representing proceeds from the sale and maturity of marketable securities, partially offset by cash used for property and equipment primarily related to the deployment of the Pinnacle and TerraPoiNT network and internal use software.
Previous wording
Net cash provided by financing activities during thethree months ended March 31, 2024 was $0.5 million, primarily reflecting cash proceeds from exercise of common stock options.
Current wording
Net cash provided by financing activities during thesix months ended June 30, 2024 was $22.7 million, primarily reflecting cash proceeds from exercise of warrants and stock options.
Previous wording
For information regarding new accounting pronouncements, and the impact of these pronouncements on our condensed consolidated financial statements, refer to Note 2 to our condensed consolidated financial statements for thethree months ended March 31, 2024 included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
For information regarding new accounting pronouncements, and the impact of these pronouncements on our condensed consolidated financial statements, refer to Note 2 to our condensed consolidated financial statements for thesix months ended June 30, 2024 included elsewhere in this Quarterly Report on Form 10-Q.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Revenue increased by $0.5 million, or 32.0%, to $2.2 million for the six months ended June 30, 2024 from $1.6 million for the six months ended June 30, 2023. The increase was driven by an increase in recurring service revenue from technology and services contracts with commercial customers, including in support of government opportunities. For the six months ended June 30, 2024, one customer accounted for 73% of total revenue and another customer accounted for 14% of total revenue. For the six months ended June 30, 2023, one customer accounted for 87% of total revenue.
Current report — wording carried from elsewhere
Depreciation and amortization expenses increased by $0.3 million, or 13%, to $2.6 million for the six months ended June 30, 2024 from $2.3 million for the six months ended June 30, 2023. The increase in depreciation and amortization expense is primarily attributable to placing TerraPoiNT network assets in service after the second quarter of 2023.